Thirty-Year Fixed Rate Mortgage: The traditional 30-year fixed-rate mortgage has a constant interest rate and monthly payments that never change. This may be a good choice if you plan to stay in your home for seven years or longer. If you plan to move within seven years, then adjustable-rate loans are usually cheaper. As a rule of thumb, it may be harder to qualify for fixed-rate loans than for adjustable rate loans. When interest rates are low, fixed-rate loans are generally not that much more expensive than adjustable-rate mortgages and may be a better deal in the long run, because you can lock in the rate for the life of your loan.

Fifteen-Year Fixed Rate Mortgage: This loan is fully amortized over a 15-year period and features constant monthly payments. It offers all the advantages of the 30-year loan, plus a lower interest rate—and you'll own your home twice as fast. The disadvantage is that, with a 15-year loan, you commit to a higher monthly payment. Many borrowers opt for a 30-year fixed-rate loan and voluntarily make larger payments that will pay off their loan in 15 years. This approach is often safer than committing to a higher monthly payment.

Adjustable Rate Mortgages (ARM): 1/1 ARM / 3/1 ARM / 5/1 ARM / 7/1 ARM / 10/1 ARM: These increasingly popular ARMs may offer the best of both worlds. Lower interest rates and a fixed payment for a period of time before it adjusts. For example, a 5/1 has a fixed monthly payment and interest for the first five years and then in year 6 turns into a adjustable-rate loan, based on the margin and current index rate which adjusts annually for the remaining 25 years. The longer the fixed rate, the higher the interest rate. It's a good choice for people who expect to move or refinance before or shortly after the adjustment occurs. 

2/1 Buy Down Mortgage: The 2/1 Buy-Down Mortgage allows the borrower to have lower payments for the first 2 years. The initial starting interest rate increases by 1% at the end of the first year and adjusts again by another 1% at the end of the second year. It then remains at a fixed interest rate for the remainder of the loan term. Borrowers often refinance at the end of the second year to obtain the best long-term rates. However, keeping the loan in place even for 3 years or more will keep their average interest rate in line with the original market rates.

Annual ARM: This loan has a rate that is recalculated once a year after the initial fixed rate term.

6 Month ARM: With this loan, the interest rate is recalculated every 6 months. Compared to Annual ARM, the rate is usually lower because the lender is only committing to a rate for 6 months at a time after the initial fixed rate term, so the lender's vulnerability is reduced.

1 Month ARM: With this loan, the interest rate is recalculated every month. Compared to 6 month or annual ARM, the rate is considerably lower because the lender is only committing to a rate for one month at a time, so the lender's vulnerability is greatly reduced.